Kellogg and Intersnack are reportedly interested in buying United Biscuits salty snacks unit

Kellogg and Intersnack are reportedly interested in buying United Biscuits' salty snacks unit

Cereal giant Kellogg has declined to comment on reports that it is considering launching a takeover bid for the salty snacks division of UK food manufacturer United Biscuits.

US buyout firm Blackstone and French private-equity group PAI Partners revealed in March they were planning to separate United Biscuits into two entities - salty snacks and bakery - suggesting the more focused businesses would "provide improved service" and "more targeted innovation and product development".

United Biscuits generated group revenues of GBP1.3bn and EBITDA of GBP230.8m in 2010. Net debt at the end of 2010 stood at GBP1.14bn. The salty snacks side of the business, which owns brands including Hula Hoops and Skips, has been valued at around GBP500m. 

The auction process is expected to comprise two rounds of bidding, reported to be starting in September, the Financial Times suggested yesterday.

A spokesperson for Kellogg declined to "comment on rumour or speculation" this morning (28 May) following a number of reports at the weekend it is one of two potential bidders for the snack business.

The US cornflakes maker moved to extend its reach in the snacking aisle earlier this year, with the US$2.7bn purchase of Pringles from Procter & Gamble. Kellogg said the acquisition "catapulted" it into the number two position in the worldwide savoury snacks category, behind PepsiCo.

While UB certainly lacks Pringles' global presence, an acquisition of the United Biscuits snacks unit would strengthen Kellogg's position in the UK and fit with the group's aim to become "a truly global cereal and snacks company".

Germany's Intersnack, one of the leading manufacturers of savoury snacks in Europe, is also rumoured to be interested in the sale.

United Biscuits' salty snacks brands would be a good fit with the products this pan-European group offer in the UK, where it manufactures and distributes private-label snacks as well as the Pom-Bear, Monster Munch and Penn State brands. In addition, Intersnack's focus on healthy snacking make a number of United Biscuits' brands - including Twiglets and KP Nuts - of particular appeal.

The company could not be reached for comment.